The Upcoming Recession Is a Planned Disaster
By The Heartland Institute | 3:00 PM on December 21, 2022
Get ready for the next unnecessary recession. The Federal Reserve, President Joe Biden, and congressional Democrats are going to stick it to everybody who works for a living. Their reasoning: you stop inflation by pushing wages down.
The Federal Reserve raised interest rates by another 0.5 percent after four consecutive 0.75 percent increases. The Fed’s action last week puts the Federal Funds Rate at 4.5 percent, the highest it has been in 15 years.
The Fed now projects growth of the nation’s Gross Domestic Product in 2023 will be less than half of what it previously expected, down from 1.2 percent to 0.5 percent.
That is no accident.
The Fed believes it still has to fight inflation, and it knows that its efforts to do so will stop economic growth, as its policies are designed to do. The Wall Street Journal summarizes it this way: “Fed officials say they combat inflation primarily by slowing the economy through tighter financial conditions—such as higher borrowing costs, lower stock prices and a stronger dollar—that curb demand.”
The Fed governors are admitting their formula for pushing prices down is to throw people out of work, make it harder to borrow money, and make imports cheaper, which will cost even more Americans their jobs. All these actions reduce wages by making people compete for scarcer jobs.
Well, you might say, if that is what it takes to stop inflation, it’s worth it, right? We tighten our belts for a while, squeeze inflation out of the economy, and then get back to normal when it’s all over.
more
https://redstate.com/heartlandinstitute/2022/12/21/the-upcoming-recession-is-a-planned-disaster-n676649
